Refinancing rental property

[jillianleab]

What is the name of your state? Virginia

I own an invetment property that I want to refinance to lower my payment. Recently the house was on the market to be sold, but we got no buyers and pulled it off. We have since rented it to tenants with a one year lease. I have a friend who works in the mortgage industry (she's an underwriter) who said we can't refinance until the house has been off the market for six months, but my Realtor had never heard of this rule. Anyone know who is right? Could it be a policy of the company my friend works for, not VA law?

Thanks.

[moburkes]

Originally Posted by jillianleab

What is the name of your state? Virginia

I own an invetment property that I want to refinance to lower my payment. Recently the house was on the market to be sold, but we got no buyers and pulled it off. We have since rented it to tenants with a one year lease. I have a friend who works in the mortgage industry (she's an underwriter) who said we can't refinance until the house has been off the market for six months, but my Realtor had never heard of this rule. Anyone know who is right? Could it be a policy of the company my friend works for, not VA law?

Thanks.

There is no such law.

[tranquility]

It's not a law, but many lending institutions have similar rules. The economics don't always work out when a loan is paid off in a short time. Pre-payment penalties is one reflection of this. If there is a "soft" pre-payment on the loan product, a lender may very well want some assurance the loan won't be paid off in a month. Making sure the owner has taken the lot off the market for some period increases the chance it won't be sold immediately. Just like there is no law requiring such treatment, there is no law prohibiting it.

[jillianleab]

Thanks for the quick replies. I figured it was just company policy, not a specific law, but it does make sense. I guess I'll give my lender a call and see what he says we can do! Thanks again!